Comments on: Simplifying the mortgage mess

By: jpr

jpr — Tue, 25 Mar 2008 18:06:10 +0000

When my wife and I would be out walking/running with our dog we used to always marvel at how people were able to afford such McMansions that dot our neighborhood and that soar above the various rooflines of the bunglaows and Cape Cods, usually with 2 or 3 cars in the driveway, and usually on only one salary paying for it all.

Now we have an idea– 3 year ARMS, Interest Only loans, and maxed out credit cards that put the owners in an ever-deepening hole.

By: Kris, in New England

Kris, in New England — Tue, 25 Mar 2008 17:16:18 +0000

Sitting on a 30-year fixed mortgage for a modest house and contemplating paying the tab for some moron’s 3-year ARM on a McMansion rankles a bit.

You got it. Rankles more than just a bit…Especially when you read about these people trashing their houses before they just abandon them. Or torching them in an effort to conceal the arson and get the insurance money.

Personal responsibility – yes there are predatory lenders but in the end, it’s the borrower who needs to know when it will be too much for them to handle. A variable rate mortgage is just that – variable.

By: jpr

jpr — Tue, 25 Mar 2008 16:40:43 +0000

And in the mean time, as more and more people get foreclosed on and get tossed out of their houses, those empty, overgrown properties soon will drag down the values of neighboring properties, including those owned by people who dilligently pay their (somewhat) affordable fixed-rate mortgage (like mine).

By: Brian R

Brian R — Mon, 24 Mar 2008 22:41:43 +0000

@Steve,

Certainly greed on the part of the lenders, but it hardly stops there. There was greed and sloth all the way up and down the line, from the borrowers that wanted more than they could afford to the credit ratings agencies that just “called it good” to the people that bought all those mortgage backed securities.

In a fair world they’d all get screwed. Unfortunately this is the US in an election year, so it’s more likely that everyone who was smart, responsible or lucky enough to stay out of the fray will get screwed instead.

Sorry if I seem bitter. Sitting on a 30-year fixed mortgage for a modest house and contemplating paying the tab for some moron’s 3-year ARM on a McMansion rankles a bit.

By: Steve

Steve — Sun, 23 Mar 2008 14:57:15 +0000

“Interest only payments”
“100% financing”
“Stated income”

Plain old greed on the part of some shady lenders.

By: Casey Tompkins

Casey Tompkins — Sun, 23 Mar 2008 03:05:53 +0000

A stellar example of the Flounder Principle in action...